The Kangaroo-2 appraisal well offshore Brazil has encountered multiple oil-bearing zones, Karoon Gas Australia Ltd. said in a news release.

Oil was confirmed and recovered from five separate reservoirs with the Palaeocene and the Maastrichtian formations.

The gross oil column thickness totals 250 m (820 ft), and no gas cap was penetrated. Work is continuing to assess the impact of the well results on the contingent resource size given the absence of an anticipated gas cap and the impact of shallower oil water contacts in some of the sands, the release said.

Following further analysis of biostratigraphic data the previously reported Eocene age of the reservoir has now been confirmed as of Palaeocene age.

Section Analysis

The Palaeocene section contains a 90 m (295 ft) gross oil-bearing reservoir with a net to gross over 70% and porosities in the range 26% to 34%, the release continued.

Three separate oil columns are present with sampling estimates of 40 degree API oil with a gas-to-oil ratio (GOR) of 500 scf/bbl. These Palaeocene oil accumulations are separate from that seen in Kangaroo-1, the release said.

The Maastrichtian section contains two oil-bearing reservoirs. At the top of the Maastrichtian an 85 m (279 ft) gross oil-bearing reservoir interval has a net to gross over 60% and porosities in the range from 22% to 26%. The lower Maastrichtian oil bearing reservoir interval has a thickness of 75 m (246 ft), a net to gross of 25% and porosities in the range of 21%-25%. Oil recovered from the Maastrichtian reservoirs is estimated to be 40 degree API with a GOR range of 550-700 scf/bbl, the release said.

Water pressure data at Kangaroo-2 shows a common pressured aquifer as seen in surrounding wells.

Forward Program

Wireline logging is expected to be completed over the coming days. At that point a production test is planned with an option to sidetrack and core being considered subject to final logging results, Karoon said in the release.

All operations on the well are expected to be completed within the next four weeks before the rig moves to drill and evaluate the Kangaroo West prospect on the western side of Kangaroo salt structure.

The Kangaroo-2 appraisal well is located in block S-M-1165, about 300 m (984 ft) updip and 4 km (2 miles) south of Kangaroo-1 and is the first well in the current Santos Basin exploration and appraisal drilling campaign, the release said. The information obtained from Kangaroo-2 will be crucial for assessing the commerciality of the Kangaroo oil field and will be the basis for the FEED phase bringing the project a step closer to commerciality.

Karoon holds a 65% interest in, and is operator of the jointly held S-M-1165 block, Santos Basin.

Upcoming Well Program

The exploration and appraisal drilling campaign, operated by Karoon, is expected to continue through first half 2015, the company said. The rig contract provides Karoon with two firm wells plus two option wells, and, in the event of a successful drilling in the first two wells provides maximum flexibility for further appraisal of the Kangaroo oil discovery, including testing and appraisal of the Kangaroo West prospect.

Following Kangaroo-2, the second firm well in the program is the Kangaroo West-1 exploration well.

Due to the large size and proximity to Kangaroo, a successful outcome at Kangaroo West-1 would materially add to any possible development of the Kangaroo oil field, Karoon said in the release.

The salt flank play was first proven by Kangaroo-1 with the intersection of a 76-m (249-ft) gross oil column and oil recovered to surface from wireline DSTs. Results of the Kangaroo-2 further confirm the viability of the play. Kangaroo West-1 is located on the western flank of the same salt structure as Kangaroo-1 and has the same trap type and reservoir and seal intervals that have been mapped into the prospect from surrounding wells, the release said.

The Olinda Star semisubmersible drilling rig is drilling the entire drilling program.